Ryanair is reportedly on the brink of signing a significant new aircraft order with Boeing, according to sources familiar with the matter. As reported by Reuters, the multi-billion-dollar deal for over 100 Boeing 737 MAX jets could be announced as early as Tuesday.
Europe’s largest budget carrier had previously halted negotiations with Boeing for at least 100 Boeing 737 MAX jets in a pricing dispute 18 months ago. In March, CEO Michael O’Leary revealed that discussions had resumed but insisted on substantial discounts.
As we previously informed, Ryanair is now considering the 200-seat 737 MAX 8200 and the 230-seat 737 MAX 10. The airline is looking to bridge its needs after 2025 when it will finish receiving aircraft from its current order for 210 Boeing 737 MAX 8200s.
Ryanair back to talks with Boeing (and the MAX 10 is not off the table)
O’Leary claims that negotiations restarted two months ago after Boeing’s CEO, Dave Calhoun, and the manufacturer’s commercial division CEO, Stan Deal, approached the company. Ryanair had walked out of negotiations with Boeing for this follow-on order in 2021 due to a disagreement over the American company’s “optimistic pricing outlook.”
One and a half years later, Boeing appears to be in a better position with the 737 MAX program, having secured significant agreements with major airlines like Air India. As a result, available slots for the post-2025 timeframe are dwindling, reducing Ryanair’s bargaining power.
The turnaround games
O’Leary has stated that the next deal could include the largest version of the 737 MAX series, the 737 MAX 10. The current MAX variant operated by Ryanair, the 8200, has the fuselage of a MAX 8 but carries more seats, helping to dilute costs. The same principle of driving higher volumes could apply to the MAX 10, which can carry up to 230 customers, further reducing unit costs.
In November, O’Leary implied that the MAX 10 could be the next new aircraft in Ryanair’s fleet. However, ordering the 737 MAX 10 could pose challenges for Ryanair’s business model, particularly its short turnarounds. The airline currently turns around a plane in 25 minutes, and it is unclear if this “golden” number can be maintained with a larger aircraft.
O’Leary told Bloomberg that the decision between the MAX 8200 and the 10 ultimately depends on the prices Boeing offers for either model. “If they give us a good discount on the extra 30 seats, we’re more likely to take MAX 10s,” said the executive. “If they don’t give us a good discount on the extra seats, we’re more likely to go with additional MAX 200s.”
Flying Ryanair’s “Gamechanger” 737 MAX 8200: 197 seats and a consistent experience
Ryanair is expected to strike a deal sooner or later. According to a report by The Economist, the airline intends to grow its traffic to 300 million yearly passengers by 2035, up from its current target of 225 million by its financial year ending March 31st, 2026. To achieve this, Ryanair will require more aircraft, but the price must also be right.
